Question

An unfinished desk is produced for $35.65 and sold for $64.20. A finished desk can be sold for $76.00. The additional processing cost to complete the finished desk is $6.15. Provide a differential analysis for further processing. Round your answers to two decimal places, if necessary. Differential revenue from further processing:

Revenue per unfinished desk $___________
Revenue per finished desk _______________
Differential revenue $____________
Differential cost per desk:
Additional cost for producing ___________
Differential from further processing __________

Answer 1

Differential revenue from further processing:

= $11.80.

Step-by-step explanation:

a) Data and Calculations:

Cost of production of an unfinished desk = $35.65

Selling price of an unfinished desk = $64.20

Selling price of a finished desk = $76.00

Additional processing cost = $6.15

Revenue per finished desk $76.00

Revenue per unfinished desk 64.20

Differential revenue $11.80

Differential cost per desk:

Cost of unfinished desk $35.65

Additional cost for producing 6.15

Differential from further processing $41.80

Unfinished Finished Differential

Revenue $64.20 $76.00 $11.80

Cost of production (35.65) (41.80) (6.15)

Net income $28.55 $34.20 $5.65